Tax reform would make food more expensive in Colombia

The official assured that the next tax reform in Colombia, which will be presented next year, it could include a point for establishing a general VAT of 19% for all food products.

Currently, 60% of the household basket is taxed at different rates of sales tax – some alimony has 19% and others 5%, according to Dinero magazine.

In this sense, It would try to establish a general tax, so that many of the products would increase in price by up to 14%.

“We have a range of products with 19% VAT, which is the VAT that we should have in general on food, although this is not the discussion we are having at the moment,” said Deputy Minister Londoño, during a debate on the tourism law in the plenary of the House of Representatives.

According to the Dian, among the taxed foods with 5% VAT in Colombia, corn flour, cereals, pasta, sugar, coffee and chocolate stand out, among others, the same ones that would increase in price if this were approved in the tax reform that the Government will propose in 2021.

In addition, those who would now be released with the payment of VAT, because currently taxed at a rate of 0%, are a good part of those that Colombians consume on a daily basis.. In the list of those with 0% VAT there are: rice, bread, baked goods, potatoes, cassava, plantain, onion, tomato, carrot, beans, peas, oranges, bananas, blackberries, tomato tree, beef, pork, chicken and fish, among others.

Dinero ensures that this point of a general VAT for food products in Colombia is included in the reform project and ensures that, if this proposal is approved, it would give the nation about 9 billion pesos a year in revenue.

Tax reform in Colombia

The possibility of a new tax reform during the current government was rejected by several sectors and, even several months ago, President Iván Duque said that this is an issue that cannot be addressed in the midst of a pandemic such as the one that he is facing the nation.

However, there are several points that the project could bring that will impact the pockets of ordinary citizens. In addition to VAT for food, the initiative of the former president of Anif Sergio Clavijo is strengthened, which could tax the wages of those earning more than 3 million pesos in the country.

“International numbers say $ 3 million or 3.5 million salaries should be taxed at a 1% rate, which won’t give you much raise, but getting people to claim to pay 1% guarantees that we give. they have a sense of belonging to take care of public money ”, explained Sergio Clavijo, to the newspaper La República, and points out that this could represent the state up to 2% of GDP.